Greenspan, please shut your mouth!

I have never been a fan of Easy Al and firmly believe that he has caused the US economy irreparable damage. He retired only in January 2006, but is already doing his utmost to explain his way out of his blunders that are now a causing a financial nightmare for his successor.

William Greider started his recent article in The Nation as follows: “Alan Greenspan has come back from the tomb of history to correct the record. He did not make any mistakes in his eighteen-year tenure as Federal Reserve chairman. He did not endorse the regressive Bush tax cuts of 2001 that pumped up the federal deficits and aggravated inequalities. He did not cause the housing bubble that is now in collapse. He did not ignore the stock market bubble that subsequently melted away and cost investors $6 trillion. He did not say the Iraq War is ‘largely about oil’. Check the record. These are all lies.”

My precise sentiments regarding the Greenman were aired last week by Richard Russell, veteran writer of the Dow Theory Letters, when he said: “I finished the Greenspan book. I firmly believe that history will see this little egotistical pip-squeak as one of the premier disasters in US history. In my opinion, Greenspan is the ultimate ‘Mr. Inflation’. Greenspan almost single-handedly set the world on the high-liquidity, super-inflation path, all the while saying or thinking that the Fed was acting ‘as if’ the dollar was still backed by gold.

“What’s so disgusting is that Greenspan traded all his earlier ideals for power and ego. Greenspan never did anything that required real courage. Greenspan was the total political animal. His legacy will decline as the years go by.

“The saddest thing is that Greenspan leaves poor, humble, honest Fed Chief Bernanke in an untenable situation. In a US so dependent on high inflation and massive liquidity, Bernanke has no choice but to ‘inflate or die’. In a normal situation, the US could take a recession and take the correction. Not now – with the US depending so heavily on inflation and massive liquidity, any substantial contraction in the money supply would bring the US economy to its knees.”

The cartoon below by Glenn McCoy, making a strong point in his characteristically unambiguous manner, says it all.

But wait, I have kept the best for last! Enter The Bubbleman, Scotto Petterson‘s very entertaining music video about this peculiar character.

The final word goes to the “The Maestro” himself: “The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.”

1 comment to Greenspan, please shut your mouth!

You are bang on the nail. However, your opening line deserves the following expansion:

I have never been a fan of Easy Al and firmly believe that he has caused the US – AND INDEED, THE GLOBAL ECONOMY, irreparable damage….

By keeping US interest rates at generational lows – indeed, even negative for a time – he planted the seeds of bubbles WORLDWIDE , particularly vis-a-vis real estate.

As our mutual friend David Fuller is wont to say “no country likes a strong currency”, and the consequence of Greenspans’ grotesque expansion of the US money supply OBLIGED the rest of the world to either (i) follow suit (ii) tough it out Darwinian style or (iii) die.

All credit, therefore to Mervyn King for at least attempting to keep his finger in the dyke.

Instead of getting the recognition he deserves for his attempt at monetary rectitude he has instead been lambasted in the media. How sad it that?